Gas tariff increased by 18 per cent

Gas rates for commercial consumers have gone up from Rs393.48 to Rs463.76 per unit.—File photo by APP

ISLAMABAD: An across-the-board increase of 18 per cent in prices of natural gas for all categories of consumers — domestic, industrial, commercial and CNG stations — with immediate effect from Friday was notified by the Oil and Gas Regulatory Authority on Thursday night.

According to the notification, the increase will yield an additional revenue of about Rs21 billion to the Sui Northern Gas Pipelines Limited (SNGPL) and Rs11 billion to the Sui Southern Gas Company Limited (SSGCL) during the current fiscal year.

The notification was earlier approved by Prime Minister Yousuf Raza Gilani.

An increase of about Rs64.02 per million British Thermal Unit (mmbtu) has been allowed in the average sale rate of SNGPL to Rs296 per unit, up by about 18 per cent.

The average sale rate for SSGCL has been allowed to go up by Rs38.06 per mmbtu -- about nine per cent.

The average sale rate for all consumers of natural gas, bought either from SSGC or SNGPL, has been increased by 18 per cent to ensure uniform gas tariff across the country.

SNGPL and SSGCL had a couple of weeks ago sought an average increase in gas prices by about Rs80 per unit and Rs57 per mmbtu, respectively, through separate petitions to Ogra to meet their estimated revenue shortfalls during the current financial year. They said the increase was necessitated by a much

higher cost of gas because of rise in international oil prices and depreciation in the value of rupee against the US dollar.

The cost of domestic gas production is linked to international oil prices that have registered a substantial increase over the past six months.

Added to this is the impact of depreciation of the rupee against dollar because international gas producers are paid in foreign currency for whatever gas they produce from domestic gas fields.

Besides, the government is required under covenants with international lending agencies to ensure a minimum of 17 to 17.5 per cent guaranteed rate of return to SNGPL and SSGCL.

DOMESTIC CONSUMERS

According to the notification, gas rates for the lowest slab (50 cubic metres per month) of domestic consumers have gone up from Rs80.65 to Rs95.01 per mmbtu and that of the second slab (50-100 cubic metres) from Rs84.45 to Rs99.48.

Likewise, rates for the third slab (100-200 cubic metres) have been increased from Rs153.73 to Rs181.10 per unit and that of the fourth slab (200-300 cubic metres) from Rs325.48 to Rs383.42.

Gas rates for fifth slab (300-400 cubic metres) have been increased from Rs423.42 to Rs498.80 per unit, followed by the sixth slab (400-500 per cubic metres) from Rs550.44 to Rs648.43 per unit and the last slab (over 500 cubic metres) from Rs730.17 to Rs860.15.

Rates for non-profit consumers like places of worship, educational institutions and armed forces’ mess, along with tandoors have been increased equal to the first four slabs of domestic consumers.

Gas rates for commercial consumers and ice factories have gone up from Rs393.48 to Rs463.76 per unit.

Rates for industrial consumers and fuel for fertiliser factories have been increased from Rs324.30 to Rs382.37 per unit. Rates for CNG stations have been increased from Rs427.15 to Rs503.64 per unit.

POWER STATIONS

Rates for Wapda’s power stations have gone up from Rs333.98 to Rs394 per unit and that of Liberty Power Project from Rs1060.4 to Rs860.

Gas tariff for independent power producers (IPPs) has gone up from Rs282.88 to Rs332.36 and that of captive power plants (CPPs) from Rs324.30 to Rs382.37.

According to the notification, CNG rates for the Potohar region have been increased from Rs49.73 per kg to Rs55.30 per kg and those for Sindh and Punjab from Rs48.54 per kg to Rs53.63 per kg.

Petroleum prices cut by 1.34 per cent

The price of petrol has been reduced by 89 paisa per litre and that of light diesel oil by Rs2.12 per litre.—Photo by APP

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) reduced on Thursday petroleum prices by 1.34 per cent to 3.5 per cent with immediate effect in line with a decline in international market.

According to a notification, the price of petrol has been reduced by 89 paisa to Rs65.11 per litre, down by 1.34 per cent and that of High Octane Blending Component (HOBC) has come down to Rs79.43 per litre, down by Rs1.09 or 1.35 per cent.

Likewise, the ex-depot sale price of kerosene has been reduced by Rs1.88 per litre to Rs60.75, down by about 3 per cent and that of light diesel oil by Rs2.12 per litre to Rs58.10, down by 3.5 per cent.

The prices of jet fuels have also been reduced by 1.3 per cent to 3 per cent, and those of JP-1, JP-4 and JP-8 by 3 per cent, 1.3 per cent and 2.9 per cent, respectively.

Accord for extended gas supply for Sindh

KARACHI: The Sui Southern Gas Company (SSGC) has inked an Extended Well Text Gas Sales and Purchase Agreement (EWT-GSPA) with Hycarbex-American Energy Inc (HAE) under which the latter will supply up to 28 mmcfd gas for a 15-month period from Haseeb Gas Field (Yasin Block # 2768-7).

The gas delivery is expected to start by the end of this month or by early January next.

The GSPA was signed by Umair Khan, MD SSGC and Dr Iftikhar A Zahid President/CEO, HAE.

Raja Irfan Nasr, managing director/CEO, Government Holdings (Pvt) Limited, which has working interests in the field, also signed the agreement on behalf of GHPL, says a media release of the SSGC.

HAE is a partner and operator of the Petroleum Concession Agreement with respect to the Yasin Block along with Government Holdings (Pvt) Limited and Hypak Asia (Pvt) Limited.

Haseeb Gas Field is located 4 to 5 kilometers from SSGC’s Shikarpur Compressor Station within the Yasin Block where further exploration for oil and gas reserves is being undertaken by HAE.

PSO floats tender for 80,000 tons of jet fuel

ISLAMABAD: Pakistan State Oil (PSO) has invited international tenders for the import of 80,000 tons of jet fuel (JP-1) during the next four months mainly due to rising demand by Nato troops in Afghanistan.

The tenders floated by the country’s largest oil marketing company also said that it might need additional 16,000 tons between February and April.

‘The imports are being made to meet the growing demand from Afghanistan as additional troops are being sent by the Nato countries there,’ said a senior PSO official.

‘Fuel is not only needed for the active operational requirements but to improve the strategic stocks also for summer, as supply lines are more frequently attacked in summer months,’ the official added.

According to Oil Companies Advisory Committee, (OCAC) the jet fuel sales increased by more than 33 per cent to 423,268 tons during July-October 2009 compared to the previous year.

Official of the OCAC said that domestic travel improved during this year compared to the last year but the major increase was from the export demands.

According to OCAC, Pakistan is currently exporting around 50,000 tons of jet fuel to Afghanistan that includes up to 30,000 tons by PSO, 12,000 and 15,000 tons by Shell Pakistan and 6,000-7,000 tons by Attock Petroleum Limited.

‘To meet the growing demand, the country has imported 199,716 tons of jet fuel during July-November this fiscal,’ the official said.

However, the officials have also said that the imports are on the rise due to declining refinery production in the country.

Leisure spending to stay strong in 2010: survey

SINGAPORE: Eat, drink and be merry — and join the majority of people in the Middle East, Africa and Asia Pacific who, a new survey shows, intend to keep on enjoying the good life in the coming year.

Dining and entertainment were the top areas most of the 10,623 people surveyed across the Asia Pacific and the Middle East said they were going to keep spending on over the next six months — regardless of the global economic climate.

It was also as one of the top three spending priorities for Africa respondents, according to a MasterCard survey that canvassed 24 markets spanning these regions.

The survey showed 16 markets out of the total ranked having fun and a meal out as their top discretionary, or non-essential, spending priority, a figure that includes many Australians, Chinese, Indians, Thais and Egyptians.

‘The latest findings are positive for a stronger outlook of domestic consumption in 2010, and barring any unexpected shocks to the economy, we expect private consumption to continue to grow,’ Yuwa Hedrick-Wong, Asia Pacific adviser for MasterCard Worldwide, said in a statement.

A previous Mastercard survey had ranked dining and entertainment as the top spend for this year in the same regions, despite the global economic downturn.

The latest poll showed consumers also determined to keep on buying fashion and accessories, another top discretionary spend, over the next six months.

The majority of Africans surveyed said they intend to buy or renovate their homes during the next six months, making that the top consumer priority in that region, but discretionary spend was also one of the top priorities for Indians, whose economy has been growing despite the global financial crisis.

The MasterCard Survey of Consumer Purchasing Priorities is released twice yearly and the latest poll was conducted in October and November.

Among the 10 main discretionary spend categories the survey looked at the most resilient, or less prone to cutbacks, appears to be private tuition and extracurricular activities for children in the Middle East and Africa.

By contrast, consumers across the Asia Pacific have said they expect to cut back least on fitness and wellness. —Reuters

UN warns of surge in food prices

ISLAMABAD: Global food prices are on the rise again, says the latest Food Outlook issued by the United Nations’ Food and Agriculture Organisation (FAO) on Wednesday.

FAO identified a number of possible causes contributing to the price rise: low levels of world cereal stocks, crop failures in major exporting countries; rapidly growing demand for agricultural commodities for bio-fuels; and rising oil prices.

As the price strengthening accelerated, several other factors emerged to reinforce the upheaval, most importantly, government export restrictions, a weakening US dollar and a growing appetite by speculators and index funds for wider commodity portfolio investment on the back of enormous global excess liquidity.

The agricultural market situation is different from that of 2007-08. World cereal stocks today are at far more ‘comfortable’ levels than they were two years ago, with the stock-to-use ratio at almost 23 per cent, 4 per centage points more than at the time. Evidently, the balance of world supply and demand is not even across all commodities, with some markets facing tighter conditions than others, says the outlook.

But, in general, supplies held by exporters are far more adequate to respond to rising demand than they were during the price surge period. On the demand side, bio-fuels remain a leading driver, but the year-on-year growth has slowed down compared with the past few years.

On the other hand, macroeconomic factors, exchange rates, volatile oil prices and, once again, rising liquidity stemming from exceptionally low interest rates continue to generate uncertainty, which food markets have to live with. There is a strong argument that the importance of these factors, in terms of their impacts on agricultural commodity prices, has increased significantly in recent times.

The FAO report says although supply and demand fundamentals will continue to shape commodity markets, the now entrenched susceptibility of the global food system to external non-food economy events requires continuous vigilance.

Wheat production in 2009 is forecast to fall slightly below last year’s record while stocks are expected to increase for the second consecutive season, given an only modest expansion envisaged for world wheat utilisation.

With world trade in 2009-10 falling sharply below the previous season’s record volume, mostly due to large harvests in importing countries in North Africa and Asia, international wheat prices fell during the first three months of the 2009-10 season, between July and September.

The most salient feature of the world rice sector in 2009 is the anticipated contraction in global rice output, the first since 2002, following an erratic pattern of the southwest Asian monsoon and other setbacks.

Although reserves will need to be drawn down somewhat in 2010 to meet the gap between global production and consumption, overall they are foreseen to remain adequate. However, rice stocks held by major exporters may fall substantially in 2010.

Clean energy to grow into $2.4 trillion industry: WWF

GENEVA: The clean energy technology sector will grow into a 1.6 trillion-euro (2.4 trillion-dollar) industry by 2020, becoming the third largest industrial sector after automobiles and electronics, WWF said Friday.

The clean energy industry, which includes wind energy infrastructure, insulation, solar panels and bio-ethanol treatment production, generated 630 billion euros in revenues in 2007, a sum that has already surpassed that of the global pharmaceutical industry, said WWF.

‘This is the clean economy growth happening now with only a partial Kyoto protocol international framework supporting clean energy development, patchy national support for green energy and huge subsidies to fossil fuel use,’ said Kim Carstensen, leader of WWF’s global climate initiative.

‘Imagine what is possible with a successful Copenhagen climate deal and the national mechanisms to deliver its outcomes — clean energy is where the money is going to be and this is where energy security is going to be,’ she added.

Germany, the United States and Japan currently lead clean energy sales, according to 2008 data cited by the WWF.

China is ranked fourth in absolute sales, but is expected to take up a ‘rapidly increasing share’ in coming years.

In terms of sales relative to gross domestic product, however, it is Denmark, Brazil and Germany which are leading the scale.

Denmark is leading wind energy and insulation products, while Brazil has a massive bio-ethanol industry.

Germany, meanwhile is a specialist in solar and wind energy products.

‘Clearly, from a national perspective there is much to gain and nothing to lose from investing in clean energy,’ said Donald Pols, Head of the Climate Programme at WWF-Netherlands.

‘Forgoing these opportunities for the sake of propping up an aging, polluting fossil fuel sector for as long as its lobbying power remains significant is acting for vested interests not the national interest.’

Some 194 nations are meeting in Copenhagen under the UN Framework Convention on Climate Change (UNFCCC), seeking to secure an agreement spelling out national pledges for curbing heat-trapping carbon emissions.

Over the past 250 years, atmospheric concentrations of these invisible, odourless, tasteless gases have risen, propelled by the unbridled use of coal, oil and gas.

The envisioned December 18 accord will also pump hundreds of billions of dollars in aid to poor countries, providing them with new and clean technology and the means to toughen their defences against the impact of climate change. —AFP

Govt to import 1mn tonnes of sugar next year

KARACHI: Federal Industries and Production Minister Mian Manzoor Ahmad Wattoo said Monday that the government had developed a long term policy to deal with sugar crisis and one million metric tonnes of sugar would be imported next year.

‘One million metric tonnes of sugar will be imported next year to meet shortage of this essential commodity,’ he said while responding to a question at the 5th consumers’ choice award ceremony organised by the Consumers Association of Pakistan (CAP) at a local hotel.

He said that the decision has been taken to ensure the sufficient availability of sugar in the country next year and keep the commodity’s rates well balanced.

Wattoo pointed out that the PM Gilani had directed the Ministry of Industries and Production to provide sugar to people through Utility Stores Corporation at Rs38 per kg.

He said that Trading Corporation of Pakistan (TCP) would supply 100,000 metric tonnes of sugar to the Utility Stores Corporation (USC) for this purpose. TCP has procured this sugar at Rs65 per kg, but it is being sold to consumers at Rs38 per kg, he added.

The minister said that the government was providing a subsidy of Rs27 per kg to make sure that common man should get the sugar at affordable rates.

However, he made it clear that sugar rates were very high in neighbouring India and Afghanistan and therefore this situation will certainly impact sugar prices in Pakistan.

The minister also maintained that since the start of new crushing season, the situation regarding the availability of sugar at Rs40 per kg had also changed.

The sugar price will be decided on the basis of its supply and demand in the open market and the government cannot fix sugar prices anymore, he said.—APP

Efforts on to get trade concessions from US, EU

LAHORE: Federal Commerce Secretary Zafar Mehmood has said that Pakistan is seeking substantial trade concessions from the US and the European Union to cope with challenges faced by its industrial sector.

Speaking at the Lahore Chamber of Commerce and Industry here on Friday he said that this was the most opportune time to win trade concessions from the US and the EU as there was a feeling in the developed world that Pakistan required to be compensated for being the hardest hit in war against terror.

He disclosed that the government had hired a European company to fight its case for getting trade concessions from the EU.

Answering a question he said that new rules and regulations were being framed for the Trade Development Authority of Pakistan, which would be implemented in a transparent manner. Various options were also being considered for encouraging local and foreign investment.

LCCI President Zafar Iqbal Chaudhry said that the business community needed direct market access to US and EU. It was a good omen that the EU had expressed its willingness to discuss the free trade agreement (FTA) with Pakistan. The government should also seek foreign expertise on small hydropower and alternative energy units.

He informed the federal secretary about the formation of Pakistan Halal Products Development Board under the LCCI and sought his support to get the board operational in the shortest possible time as it would help Pakistan get recognition in global Halal market.

Abu Dhabi bails out Dubai with $10 billion

DUBAI: Abu Dhabi stepped in to help fellow United Arab Emirates member Dubai with a $10 billion injection, of which $4.1 billion was allocated to troubled state-owned conglomerate Dubai World to pay immediate obligations, Dubai said on Monday.

The move was the least expected of all options Dubai had on the table after requesting a standstill on $26 billion in Dubai World debt on Nov. 25, alarming markets and shaking the image of the emirate as a regional business hub.

‘The government of Abu Dhabi has agreed to fund $10 billion to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World,’ the chairman of the Dubai Supreme Fiscal Committee said in a statement.

‘As a first action for the new fund, the government of Dubai has authorised $4.1 billion to be used to pay the sukuk obligations that are due today.’

The yen fell sharply against other currencies on the news, while the dollar shot up to 88.90 yen and the euro also jumped to 130.43 yen.

S&P futures jumped to be up 0.7 per cent, reversing early losses and pushing Treasury futures to session lows. Hong Kong’s Hang Seng index shot up 300 points in the last minutes of morning trade to finish in positive territory, while other markets across Asia also pushed higher.

Abu Dhabi is the largest member of the United Arab Emirates federation and a big oil exporter.

‘We are here today to reassure investors, financial and trade creditors, employees, and our citizens that our government will act at all times in accordance with market principles and internationally accepted business practices,’

Sheikh Ahmed bin Saaed al-Maktoum said in the statement.

‘Dubai is, and will continue to be, a strong and vibrant global financial centre. Our best days are yet to come.’

Excess funds would be used to cater to Dubai Worlds needs up until the end of April 2010, the statement said.

Dubai has announced a bankruptcy law that it said could be used in case Dubai World and creditors failed to reach an agreement on debt maturing in the future.

‘Dubai will announce a comprehensive reorganisation law, a framework that is based upon internationally accepted standards for transparency and creditor protection,’ Sheikh Ahmed said.

‘This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring of its remaining obligations.’